Many people believe that writing a will completes their financial planning. However, another important document—nomination—often gets overlooked.
A person may change their will after marriage, the birth of a child, or other major family changes, yet still keep an old nominee on bank accounts or investments.
A nominee can claim or receive an asset from a financial institution after the account holder’s death. But this does not automatically make the nominee the final owner; the will and succession law decide the ultimate ownership.
For mutual funds and demat accounts, SEBI’s rules allow nominations and specify how the nominee receives the assets. Yet the framework also protects the interests of legal heirs and the deceased’s estate.
Because of this, a will remains crucial for determining how the estate should ultimately be distributed.
A nomination that was correct ten years ago may no longer suit the current family situation. A parent may have been named when the person was single, but after marriage the spouse or children might be the rightful heirs.
Nominees can also die, move away, or become estranged from the family, making the old nomination irrelevant.
A will cannot instantly correct an outdated nomination in the institution’s records. If the nominee details and the will differ, families may face extra paperwork and potential disputes.
Updating nominations separately allows banks, insurers, mutual fund houses, and other institutions to follow the latest instructions in their own records.
Review every major financial account—bank accounts, fixed deposits, mutual funds, demat accounts, insurance policies, EPF, and other assets. Updating one does not automatically update all.
Life events such as marriage, divorce, birth or adoption of a child, death of a nominee, changes in family relationships, or significant wealth changes should trigger a fresh review.
Even without a major event, checking nominations every few years helps catch old or incomplete information.
Maintain a simple list of assets, account details, and the locations of important documents. Store this information securely and ensure trusted people know how to access it when needed.
The best approach is to make the will and nominations work together. The will should clearly state how assets are to be distributed, while nominations keep institutions updated for smooth claim processing.
Estate planning is not a one‑time task. A will records your wishes, but nominations help your family navigate the financial system after you are gone. Reviewing both together prevents an outdated form from becoming a bigger problem for those you leave behind.